In Japan, the decline in the index came as the U.S. dollar slipped further against the yen, and was at odds with bounces seen in other regional markets following the recent sell-off in stocks.

Automakers finished the session mixed, with Toyota sliding 2.5% Financials, which were in positive territory in the early going, gave up gains to trade lower, with Mitsubishi UFJ Financial Group shedding 1.5% by the end of the day.

Other blue chips also saw early gains erased: Fanuc Manufacturing ended the day lower by 0.7% and Fast Retailing closed down 1.1%.

Honda Motor will recall around 350,000 cars in China due to an engine-related problem, Reuters reported. No accidents had been tied to the issue. Honda shares closed down 1.7%.

Fujifilm Holdings finished the session down 3.2%. On Tuesday, Xerox shareholders Carl Icahn and Darwin Deason criticized a deal which would see Xerox sold to Fujifilm

Against the yen, the U.S. dollar pulled back to trade at 108.14, extending losses seen in the last session.

Japanese Prime Minister Shinzo Abe said Tuesday he was not yet decided on who would be the next governor of the Bank of Japan. Finance minister Taro Aso said that the individual would have to be fluent in English. Media reports last week indicated current governor Haruhiko Kuroda would be re-appointed when his term ends in April, the news agency said.

Financials traded firmly in positive territory: HSBC gained 0.7% and China Construction Bank advanced 1.4%.. Hong Kong Exchanges and Clearing was up 2.6% after the appointment of two new board members.

Property developers were also in the money, with China Evergrande Group up 3.3%. HNA Group unit Hong Kong International Construction Investment Group traded higher by 8.5% ahead of the close after it said it would sell two plots of land to Henderson Land Development for almost 16 billion Hong Kong dollars ($2.05 billion U.S.). Henderson shares were up 1%

Trading volumes were lighter than usual, with southbound trading on the stock connect closed, ahead of the Lunar New Year holiday.

In Korea, gains were driven by strong showings from tech heavyweights Samsung Electronics and SK Hynix, which surged 4% and 4.3%, respectively.

Automakers came under pressure: Hyundai Motor lost 1% while Kia Motors slid 2.3% by the end of the day. Manufacturing names were also downbeat. Steelmaker Posco declined 1.2% and Hyundai Steel shed 0.8%. LG Chem lost early gains to slide 2% on the day.

Down Under, the S&P/ASX 200 closed higher as earnings season rolled on. The materials and gold sectors was among the best-performers on the day, while the heavily-weighted financials sector edged higher by 0.5%

Meanwhile, National Australia Bank's business conditions index rose in January, indicating strong business activity in the country. The index stood at +19 index points for the month, above the long-run average of +5 index points, NAB said.

Elsewhere, shares of CapitaLand were up 2% after the developer announced Tuesday its post-tax profit for 2017 rose 30.3% to 1.55 billion Singapore dollars ($1.17 billion U.S.). Fourth-quarter post-tax profit declined 37.8% to S$267.7 million ($202.1 million U.S.).

CHINA

In Shanghai, the CSI 300 gained 45.53 points, or 1.2%, to 3,935.63. China's Fosun is poised to buy a majority stake in French fashion house Lanvin. Fosun shares were up 1.6%.

In other markets

Taiwan markets were shuttered for holiday

The Kospi in Korea tacked on 9.81 points, or 0.4%, to 2,385.38

In Singapore, the Straits Times Index added 30.09 points, or 0.9%, to 3,415.07

In New Zealand, the NZX 50 recouped 63.16 points, or 0.8%, to 8,122.22